Dealer Fraud

Before entering a car dealership, you should be well-informed and prepared to avoid becoming a dealer fraud victim. The most important way you may prepare yourself is by researching the types of cars and deals that are out there. Most car companies have websites which enable you to learn about the different models, options and prices of most, if not all, of the automobiles available. You can even build the car that you are interested in, including options and packages, and then see what the car company will quote as the price. With this information you can go back to the car dealers and show them that price quote.

In addition, some of these auto company websites allow you to contact the local car dealership directly. This is a great way to deal with things, because then you can send in exactly what you are willing to pay, or what the car company quoted the price to be, without actually having to sit down at the car dealership and run the risk of being defrauded by a high-pressure sales situation. You may also send the price quote that you have to other dealerships by email, which will encourage the different car dealers to compete for your business. This may help in lowering the price you have to pay for your car, because one auto dealer may offer you a better deal than another.

If you do decide to go down to the car dealership to bargain personally, doing some research on values, car prices, deals, incentives and rebates may really pay off. While it is impossible to avoid working with car dealers at all, having the know-how about pricing and car financing scams may really help in smoothing out the bargaining process.

Odometer is an instrument indicating distance traveled by a vehicle, but criminals are using various instruments to roll back the milometer to sell the vehicle at a higher price.

Odometer rollback schemes represent a high profitable car dealer fraud. In addition to an old machine with false mileage you also get a car which will most likely need more maintenance and repair, thus almost guaranteeing you a return to the car repair shop. And of course the result is more money to be paid by you. Only a low percentage of odometer fraud is executed by amateurs, usually this crime is associated with intelligent organizations or individuals who develop complicated schemes very difficult to detect and investigate. Not only the end consumers are affected by this car fraud, but also legitimate re-sellers.

Recently car manufacturers make use of digital mileage meters because they are cheaper to produce than a mechanical dashboard and easier to fit into the car as there is no mechanical speedometer cable.

Another reason for developing digital odometers was to alleviate the problem of odometer tampering. Electrical pulses in the car wiring may cause the dashboard data, which is stored internally on an EEPROM (Electrically Erasable Programmable Read Only Memory), to become corrupted due to a car accident or a simple mistake in electronics. Therefore, of course, also a tool exists to “correct” the mileage numbers who were displayed incorrectly.

Unfortunately just as quickly as the technology was developed, scam artists learned how to use it for the wrong reasons. It is similar to computer hacking, with the right software and hardware you can penetrate right into the system making the desired changes. You can purchase these tools anywhere in a car shop or online. Since digital odometers don’t have any visible moving parts they are even harder to detect than traditional mechanical odometers, so the vehicle’s condition and a detailed history report are the best clues a buyer has for determining whether clocking has occurred. Legally this service is displayed as “mileage correction”.

Auto dealer scams are a big concern for many potential car buyers who may easily become dealer fraud victims simply because of lack of homework and knowledge in this field.

Altering the Bill of Sale

Never sign a bill of sale with terms that are “subject to bank approval” or have similar wording. Some dealerships convince customers to sign such a document and release new cars to their happy owners, only to call the buyers back a few days later to say that the loan fell through and they need to come back in to sign some new paperwork, which almost always costs buyers more than the negotiated price. Never drive your car off from the dealership until all the paperwork is filled out completely.

Inflating Payments

A salesman will ask you how much you are willing to pay each month, and you will throw out a number—say, $450 a month. He will ask how much more you could afford. You add another 50 bucks. In your mind, you were just theorizing, but to the salesman, you just committed to a $500 minimum monthly payment. Instead, when a salesman will ask how much you can pay each month, tell him you will not discuss monthly payments and only want to talk purchase price; you’ll decide on monthly payments after you’ve settled on a fair price.

Misplacing Trade-In Keys

If you are thinking of trading in your old car when buying a new one, someone may borrow your keys to evaluate your ride. If negotiations come to a stop and you try to leave, you might find that they’ve been “misplaced” in order to prevent you from leaving and entice you to make a deal you aren’t comfortable with. Bring two sets of keys with you and this won’t be a problem.

Watch for these auto dealer tricks else you will most likely need a dealer fraud attorney’s help in the future.

According to statistics used car buyers have a one in three chance of buying a vehicle that’s subject to car dealer fraud. But with some care you can avoid them and find the car of your dreams.

What Scammers Do?

* Selling a car that’s been repaired after an accident. The frame might be bent then re-straightened, or any number of faults could be covered. Obviously, they are not going to tell you that - they simply want to sell the car. Buy it and you could be riding a death trap.

* Selling stolen vehicles. Only two-thirds of cars stolen each year are recovered. Many stolen cars are re-sold. If you’ve bought a car and the police find it, they’ll take it. In theory you can pursue the seller for your money - but what are the odds of finding him?

* Selling a car that’s not paid for yet. If you knew about the debt, the finance company can take the car from you. You can keep it if you didn’t know - but how do you prove it?

How to Avoid the Scam?

* Make sure the seller may produce all the proper documentation, and that the car has a VIN number.

* Remember that a car more than three years old must have MOT certificates. Check it to avoid odometer fraud.

* Always ask to see a seller’s proof of identity. If it’s a private sale, look at their insurance policy.

* Find out about the vehicle’s history before you buy. The AA or the HPI can tell you.

* Have the vehicle checked. You can bring in your own mechanic or trust a motoring organization.

* Never buy from anyone who’s selling a car in a motorway service area - that’s asking for trouble. If possible, go to the seller’s house.

* Watch out for ads where car dealers pretend to be private sellers. In this case they dodge some legal obligations and are probably trying to sell a car they can’t sell otherwise.

Auto financing scams are often contrived by car dealerships, salesmen, finance office staff and other lenders. To avoid car financing scams, buyers must prepare thoroughly for the process of getting car financing. Look through the following auto financing scams to avoid becoming a victim of car dealer fraud.

Window etching trick

Window etching is a very common car dealer trick. The dealer will offer to etch the VIN number of your car onto the window of the car for a price. Basically, the price ranges from $300 to $1,000. Some buyers think that they did a good job by being able to talk down the price to a few hundred dollars, but unfortunately for them, a few hundred dollars is still a good amount of money. The best way to avoid this kind of scam is to buy an etching kit that you can do on your own. This is available in most auto shops and costs around $20. See how much they profit from you!

Warranty extension

Although this type of car financing scam is old already, it is still being used and there are a lot of buyers who fall for this trick. How is this scam designed? When you make a loan for the car, the dealer will tell you that you are required to purchase an extended warranty because it is one of the conditions of the bank. There is a simple way of avoiding this scam. Ask the dealer to specify in writing that the extended warranty is required for the loan to be approved. The dealer will most likely find a way to have it excluded. If he persists in including the extended warranty, refuse to do business with this guy and go to other dealerships.

Always keep these car dealer scams in mind if you are going to buy a car. If you or a friend of yours were treated fairly by a dealer in the past, consider using the same dealership again.

Car dealer tricks are various and being aware of them is more than important. If you are not careful enough you can get ripped off in car buying process without even knowing it. Car dealers sell cars every day; you buy one surely not even every month. So car dealers have predominance over you in this particular case. In this article we will try to outline how to watch for car dealer tricks.

Step 1

The first step is to tell the sales person that you are not going to discuss rebates until you have agreed on the price of the car. Rebates are intended to attract car buyers into the showroom, and very often they do. However, rebates are sent directly from the manufacturer, they are not connected with the price you negotiate for your new car. Once you have negotiated the price make sure the rebate is then deducted from the price on the final bill of sale.

Step 2

The second step is to avoid high monthly payments. The sales person will ask what you are willing to pay each month, whatever number you throw out will be the least you will ever pay.  Talk only about the final sales price of the car, then once that is decided you will work out what your payments each month will be.

Step 3

The third step is to avoid fees that are extra money makers for the dealer. Negotiate the final price of the car and then if the dealer tries to throw on extra fees after that is done do not pay them under any circumstances. Tell them that the price you negotiated is the price that you will pay, and tell them to build it into the price or you are walking out.

Step 4

The fourth step for avoiding car dealer fraud is to secure your own financing from someone else besides the dealer. This way you can have a secured rate and if the dealer can’t beat it, then forget their financing and do it on your own.

While most people are aware of common car dealer scams, less experienced buyers may fall prey to their tactics. When selling a new or used car, car dealerships profit in two ways. They profit from the sale of the vehicle, and from the interest paid by the buyer. Hence, the goal of most car dealerships is to trick buyers into paying more money for their car.

Dealership Mark-Ups

Car dealerships have a close relationship with certain finance companies. Thus, the car dealerships will likely encourage buyers to use a specific finance company. If possible, secure your own financing with a bank or credit union. Because car dealerships also profit from the interest paid, the in-house finance company may increase the loan rate by a few points. The difference paid is received by the dealership.

Dealership mark-ups may be avoided by simply comparing auto loan lenders. Do not accept the first loan package offered, and never accept dealership financing without shopping around. Request a no-obligation quote from an auto loan broker. This way, you acquire multiple quotes from honest lenders.

Upside Down Auto loans

In an effort to finance everyone, some car dealerships offer crazy loan packages. This might include zero down loans, extended loan terms, etc. While these options sound appealing, and they may help you afford a nicer car, keep in mind that car’s lose their value quickly. Thus, avoid long finance periods. If possible, attempt to have the car paid off within four years. Also, save money for a down payment.

In case you feel you have already fallen a victim to car dealer fraud, contact an experienced car dealer fraud attorney for further help.

Do your homework accurately before entering the car dealership to avoid the potential threat of becoming a car dealer fraud victim. Here are some useful questions to ask a used car dealer:

1.    What is the dealership’s return policy?

High-pressure dealerships will most likely laugh at this question. However, a consumer friendly car dealership will probably give you time to rethink the purchase and at least provide you equal value. No dealership is going to offer you cash back.

2.    What is your cash price for this used car?

Cash is king, even at used car dealerships.

3.    What new equipment comes as part of the purchase?

See if you can get the dealer to throw in e.g. a set of new tires. If the used car’s mileage is approaching 100,000 a timing belt might be a nice touch.

4.    What service has the car dealership performed on the used car since acquiring it?

This helps you to determine what value you’re getting for your purchase.

5.    Do you take trade-ins?

In case the dealership handles this for you it will make your life a lot easier if.

6.    Is a CarFax report provided before purchase?

A reputable dealership will have no problem with this. Make sure the report’s VIN (vehicle identification number) matches the VIN on the used car you’re looking at.

With the help of these questions, hopefully you will not need a dealer fraud attorney’s help in the future.

To avoid becoming a car dealer fraud victim, one should beware of all kinds of auto financing scams. Below are some of the most common auto financing scams that are utilized by some fraudulent car dealers.

Market adjustment fee

The dealer will try to convince you that the vehicle you want is selling like hot cakes and is very popular. In order to sell you the vehicle, they will do some “market adjustments” amounting to a few thousand dollars. Even if the car you want is very popular and is very much in demand, if it is in stock you should not be tempted because getting a “popular” car is not worth it if you have to pay a few thousand dollars more. You should never pay more than the MSRP (manufacturer’s suggested retail price).

Yoyo scam

You will be allowed by the dealer to take the car home as soon as possible. The dealer will take care of the financing, a few days later he will contact you again and tell you that there was a problem with your financing plan. He will tell you to set up a new financing scheme which, of course, will be at a higher cost.

Be wary of this car dealer trick and avoid it at all costs if you detect it. If you have a bad credit standing, don’t have your financing done by the car dealer and make arrangements for your own financing. Never take the car home immediately. Wait for at least 24 hours to make sure that the processing of your financing scheme has already been completed. By allowing one whole day to pass by, you are assured that the dealer cannot use this scam on you.

Buying a new car is like buying anything else on the market, only a little more stressful.  Stressful because car dealers are trained not to take “no” for an answer, and many word games and phrases come into play to help them to get you to close the deal.

So you can be easily led to think that you are getting a good deal, when in fact you could be getting a bad deal.  This is their job; they improve their craft all day from 9:00 to 5:00.

The new car sale price trick isn’t usually included in the list of the ‘official’ car dealer scams, but it’s worth discussing.

Surely you’ve noticed how retail stores will offer a 50% off deal on a piece of merchandise, but in truth the price of the item has been increased in the first place.  This same marketing strategy applies to selling cars. If a company marks up the price by 55%, and sells it for 50% off of that price, you are actually paying 5% more for the item than it originally costs.

This is a very common way for car dealerships to work.

They may offer a $4000 cash back deal on your trade-in while the other fees and interest rates will be higher than normal. But they’re hoping that this $4000 cash back offer will temporarily blind you long enough for you to sign the papers.  So while a car dealership may make the numbers sound great, they will try to get you with the other fees.  Let them “try” whatever they want; your job is to not be fooled by their tricks and eventually not to become a car dealer fraud victim.